THE FINANCIAL ASPECTS OF AGGREGATE PRODUCTION PLANNING: AN APPLICATION OF TIME‐PROVEN TECHNIQUES

Abstract

This study presents an integrative approach to addressing the aggregate production problem. The solution suggested by the Linear Decision Rule (LDR) is used to generate the cash budget for a Portuguese mining firm. The generated budget is then compared to the real cash budget of the firm. The results of this study tend to underscore the need for integrating the production and finance subsystem of the firm when devising the production plan. Significant savings resulted from this approach.